The IMF Works in Collusion with Currency Speculators and the Ukrainian Government

Ukraine wasn’t able to reach an agreement with the IMF over a new program of crediting. After two-weeks of work, the mission of the International Monetary Fund left Kiev without the grounds to recommend to the Board of Directors of the Fund to start a new program with Ukraine.

The negotiations in Kiev with the IMF mission that took place from September 12th stalled after the statement of the Prime Minister Aleksey Goncharuk, who in an interview with the Financial times opened up about “Privatbank” and its former owners at the wrong right time. Such intentions of the head of the Cabinet of Ministers caused the IMF to be alarmed, therefore it decided to postpone the question of a new program of financial aid to Ukraine until all questions that are “inconvenient” for the new authorities have been clarified.

Users of social networks evaluated the failure of the latest stage of cooperation with the IMF differently, first and foremost depending on their economic awareness of this matter and also owing to other, so to speak, ideological and mercenary motives. Anyway, the discussion about the benefits and negatives of the International Monetary Fund’s aid turned out to be very curious.

Perhaps, the most competent analysis of the scheme of the Fund’s work in countries similar to Ukraine was submitted by the former Prime Minister of Ukraine Nikolay Azarov. On his Facebook page he explained on September 27th how international speculators siphon Ukraine’s budget.


“How currency speculators ‘extract’ money from Ukraine

Recently the National Bank, along with the Cabinet of Ministers, has been carrying out the continuous issuance of domestic government bonds, which are placed in hryvnia at a huge 20%.

At this moment currency speculators from abroad come in with dollars. In Ukraine they sell dollars, buy hryvnia, and for this money redeem bonds.

The monetary resource abroad is cheap – i.e., large sums can be taken at a small percentage.

The exchange rate of the National Bank in January was ≈28 hryvnia for $1. For example, $100 million at a rate of 28 came into Ukraine – it is 2.8 billion hryvnia. They were used to purchase domestic government bonds with a profitability of 20%.

And what happened a year later? 2.8 billion hryvnia plus 560 million hryvnia of interest totals 3.36 billion hryvnia. Net income – 560 million hryvnia. This is changed into dollars. But the rate is already 24.5 hryvnia for $1. This means that as a result of the exchange transactions, the speculator receives $137 million. In his country he returns the loan, pays 0.5% for its use. And receives $36.5 million net from scratch.

And if to speak not about millions of dollars, but about billions?

After all, all this money is ‘extracted’ from our country. Such rates of return in the West don’t exist anywhere. Therefore the National Bank, along with the Cabinet of Ministers, pursues this policy, bleeding the budget of Ukraine.

But trying to build this pyramid indefinitely won’t work. 2019 is the last year of the credit deferral received by Ukraine under the Yatsenyuk-Yaresko bond restructuring agreement.”


Cooperation with the International Monetary Fund, which is almost completely controlled by western countries – first and foremost the US – has caused a fierce controversy for a long time. Using the example of the economic model of Ukraine that was brought to the absolute limit by western proteges like Nataliya Yaresko and various “Varangians” after 2014, it is possible to talk about the practical embodiment of a neocolonial financial policy.

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In Ukraine representatives of the neoliberal economic school try to imagine the benefit of speculative capital inflows, calling it investments and inflating GDP indicators. Concerning this the current government completely repeats the methods of its predecessor, and only accelerates the pace of borrowing from the IMF. At the same time, an attempt is made to present the banal arrival of international currency speculators under the guise of IMF officials and local government as a condition for GDP growth and economic success.


Fyodor Fefelov

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